The trend brought down the national late-payment rate on home loans in the third quarter to a five-year low, credit reporting agency TransUnion said Tuesday.

The percentage of mortgage holders at least two months behind on their payments fell in the July-September quarter to 4.09 percent from a revised 5.33 percent a year earlier, according to the firm, whose data go back to 1992.

The latest rate also declined from 4.32 percent in the second quarter.

The last time the mortgage delinquency rate was lower was the third quarter of 2008.

Within a few years of setting that mark, foreclosures began to mount as home values tumbled from housing-boom highs, leaving many homeowners in negative equity — owing more on their mortgage than the value of their home. The dynamic drove mortgage delinquencies higher, peaking at nearly 7 percent in the fourth quarter of 2009.

The rate of late payments on home loans has been steadily declining over the past five quarters. At the same time, U.S. home sales and prices have been rebounding over the past two years, while foreclosures have been declining.

Moderate but stable job gains, still-low mortgage interest rates, and tight supply of homes for sale have helped fuel the housing rebound. That's also made it easier for homeowners to refinance, catch up on payments or sell their home, avoiding foreclosure.

Even so, the mortgage delinquency rate is still above the 1 to 2 percent average historical range. That suggests that many homeowners still are struggling to make their payments. It also reflects that many home loans made during the housing boom remain unpaid but have yet to work their way through the foreclosure process.

Loans made in the years after the housing boom are generally being paid on time, so as more of the older loans listed on banks' books as unpaid get resolved, the overall mortgage delinquency rate should continue to decline, said Tim Martin, group vice president of U.S Housing for TransUnion's financial services business unit.

"The new mortgages are still performing very well, at very low delinquency rates," Martin said. "That's why we're expecting more improvement to come."

TransUnion forecasts that the national mortgage delinquency rate will drop to just under 4 percent by the end of year.

All the states posted an annual drop in late-payment rates during the third quarter, with California, Nevada, Arizona, Colorado and Utah registering declines of more than 30 percent.

TransUnion draws its data from 52 million installment-based mortgages in the U.S.